Australia’s top union official and a former Liberals deputy leader have attacked the federal government’s work for the dole scheme as a racially discriminatory policy that unfairly targets remote indigenous communities.

In a speech to the Garma Festival on Sunday, Australian Council of Trade Unions secretary Sally McManus said the controversial Community Development Program denies participants living in remote regions, 85 per cent of whom are Aboriginal, the same basic workplace rights afforded to other Australians.

Former Liberal deputy leader Fred Chaney said the $1.5 billion initiative, which covers more than 35,000 mostly Aboriginal people, has seriously disadvantaged vulnerable people.

A spokesman for Indigenous Affairs Minister Nigel Scullion said under the scheme jobseekers living in the biggest cities and remote communities have mutual obligations of up to 25 hours work per week.

The minister’s spokesman said a new CDP model will be developed in partnership with Aboriginal groups with proposals to introduce a wage-based system with top up arrangements to better support the transition to employment, weekly payments and more funding for local community activities.